Introduction the fourteenth finance commission ffc was constituted by the president on january 2, 20 to give recommendations on specified aspects of centre state fiscal relations during 201520. List of finance commissions and their chairmans heads. The 14 th finance commission of india is constituted in the chairmanship of the former rbi governor mr. The 14th finance commission report has been accepted by the center,the report has been. The members of the 14th finance commission are dr m govindha rao, sushma nath, prof abhijit sen, dr sudipto mundle. Exams 2018 dear students, ssc has released notification for the recruitment of clerical post in different government organizations, now you need to buckle down and start your preparation. The committee, to be headed by chairman of the fc, nk singh, will recommend a debt and fiscal consolidation roadmap for fy21fy25 for the central government, overall states and general government and attempt building up scenarios for public sector enterprises. The finance commission also decides the share of taxes and grants to be given to the local bodies in states. Terms of reference of the 14th finance commission soon. Five years ago, when the 14th finance commission recommended an increase in devolution of funds to state governments and a hike in the share of untied funds they received, it was heralded as a new. The fourteenth finance commission ffc was constituted by the president on january 2, 20 to give recommendations on specified aspects of centre state fiscal relations during 201520. The commission is slated to submit its recommendations by october 30 th, 2019 15 th finance commission members. The fourteenth finance commission ffc union budget. States fear that union will use it as an excuse to keep more funds to itself, and the devolution may be reduced to less than 42%.
This is 10 percentage points higher than the recommendation of th finance commission. Y v reddy the share of states in the net proceeds of the shareable central taxes should be 42%. Reddy 14th finance commission holds that tax devolution is the primary route for resource transfer to. Guidelines for local body grants recommended by the fourteenth finance commission. For the period from 1st april, 2015 to 31st march, 2020, the 14th finance commission ffc was constituted by the orders of president on 2nd january, 20 and submitted its report on 15thdecember, 2014. Main recommendation of the twelfth finance commission. The finance commission is a constitutionally mandated body that is at the centre of fiscal federalism.
The headquarter of finance commission is in new delhi. Previously, the planning commission undertook plan expenditures, but now, with more power in the hands of fc, revolutionary measures to equalise opportunities, bring uniformity in public services and promote labor intensive growth. The government today said terms of reference of the 14th finance commission along with name of its chairman will be notified soon. Mar 21, 2015 finance commission is appointed every five years and it consists of one chairman and four other members. Report of the 15th finance commission for fy 202021. Major recommendations of th finance commission headed by shri vijay. Vitta ayoga was established by the president of india in 1951. Key recommendations of the 14th finance commission i. The commission submitted its report to the president on december 15, 2014.
Union government, pointing out that apprehensions in the. Fourteenth finance commission ffc for rural and urban local bodies local bodies grant. This along with others was completely accepted by the central government, thereby generating a positive momentum towards cooperative federalism. This note presents an overview of the changes to the fiscal architecture in india over the past year, as well as those anticipated in the near future. On 5th december 2014, the 14th finance commission presented its report to the union government. Recommendations of the 14th finance commission the hindu. Thirteenth finance commission submitted its report in parliament on february 25, 2010.
The fourteenth finance commission had submitted its report to the president pranab mukherjee in december 2014. The first finance commission was formed on 22 november, 1951. The recommendations of the commission entered force on april 2015. The fifteenth finance commission was constituted on 27 november 2017 against the backdrop of the abolition of planning commission and the introduction of the goods and services tax gst, which has fundamentally redefined federal fiscal relations. The fourteenth finance commission was constituted by the president under article 280 of the constitution on jan. Article 275 grant in aid of revenues grantinaidstatutory grantsnonplan grants are to.
This is the largest ever jump in percentage of devolution. Area is used as a criterion as a state with larger area has to incur additional administrative costs to deliver services. Finance commission is appointed every five years and it consists of one chairman and four other members. Pdf the ability of the finance commission in shaping fiscal federalism often.
The finance commission has a chairman and four members appointed by the president of india. The 14th finance commission had importantly recommended for greater devolution by increasing state share from 32% to 42% in the central tax kitty. Nov 30, 2015 14th finance commission of india the fourteenth finance commission fcxiv was constituted by the president on 2 january 20 to make recommendations for the period 201520. Thirteenth finance commission economic and political weekly. The finance commission is a constitutional body which is established under the article 280 of indian constitution. The fourteenth finance commission is to be commended for bringing states to the forefront of the development paradigm. The award is transformational but the fall in progressivity is of concern. Aiming to increase forest cover of india the 14th finance commission for the first time has recast its fiscal transfer formula, according to it the share of central tax r. The disbursement of the performance grant in fourteenth finance commission. The following order made by the president is to be published for general information. Major recommendations of 14th finance commission headed by prof. The fourteenth finance commission ffc was appointed on 2 nd january, 20 under the chairmanship of dr. Highlights of 14th finance commission report february 2015 ficci economic affairs and research division government accepts 14th finance commission recommendation for tax devolution receipts states share in the net proceeds of union tax revenues increased to 42% from 32% earlier.
You are aware that as per the recommendations of 14th finance commission,government hasdecidedto provide grants worth rs. The finance commission can be constituted at such an earlier time as the president considers necessary. The thirteenth finance commission was required to look into the revenue impact of the introduction of the goods and services tax. The 14th finance commission used the 2011 population data, in addition to the 1971 data. Guidelines for local body grants recommended by the. Up, uttarkhand, tamil nadu, odisha, rajasthan, bihar, assam and himachal. Other than tax devolution vertical and horizontal which are specified in percentages, other transfers. Fourteenth finance commission finance commission, india. The fifteenth finance commission xvfc was constituted in november 2017 to give recommendations for vertical and horizontal devolution of taxes for five fiscal years, commencing 1 april 2020.
The finance commission fc is constituted by the president of india every fifth year under article 280 of the constitution. Set up under article 280 of the constitution, its core responsibility is to evaluate the state of finances of the union and state governments, recommend the sharing of taxes between them, lay down the principles determining the distribution of these taxes among states. In the case of the 14th finance commission, that was 25%. Its report, based on the recommendations of a task force constituted to study the issue, recommends a highly uniform and centralised format that does not adequately recognise a tax reform exercise in a multilevel fiscal system that involves compromises. Gk, general studies, optional notes for upsc, ias, banking, civil services. This part of tax proceeds is called finance commission grants, which is a part of the union budget. The bifurcation of ap into ap and telangana has resulted in slightly lower allocation for the combination. It is headed by former revenue secretary and former rajya sabha mp n. Finance commission in its report has given their views on the devolution of tax receipts from the centre to the states from 1st april 2015 to 31st march 2020. Some of the other factors that the commission takes into account are per capita income, area, and fiscal discipline.
With the situation being as it is, the successive finance commissions have been set up in order to facilitate. The fourteenth finance commission of india was a finance commission constituted on 2 january 20. The seceretary of the 14th finance commission is ajay narayan jha. Recommendations 14th finance commission headed by former rbi governor y. Reddy for the period of april 1, 2015, to march 31, 2020 the 14th finance commission. Apr 27, 2020 the 14 th finance commission of india is constituted in the chairmanship of the former rbi governor mr. Website content managed by department of expenditure,ministry of finance,goi designed, developed and hosted by national informatics centre nic last updated. The 1% decrease is to provide for the newly formed union territories of jammu and kashmir, and ladakh from the resources of the central government. Aiming to increase forest cover of india the 14th finance commission for the first time has recast its fiscal transfer formula, according to it the share of central tax revenues will be distributed between the 29 states on how much forest they have maintained.
Govinda rao, abhijit sen, sudipto mundle, and an jha. The 14th finance commission report has been accepted by the center,the report has been tabled today and it recommended that the center transfer 42% of divisible pool to the states, including taxes and grants the th finance commission had suggested it a 39. The accepted recommendations are for the fiveyear period 201516 to 201920. The thirteenth finance commission should be set up at the beginning of 2007 and appropriate and adequate arrangements for the office and residence of the chairman and members of the commission must be made before the appointment of the commission, so that commissions time is not wasted in routine administrative matters. Recomendations of the 14th finance commission article 280 of the constitution of india requires the constitution of a finance commission every five years, or earlier. Article 280 of the constitution of india requires the constitution of a finance commission every five years, or earlier.
The 15th finance commission was constituted on november 27, 2017. The ffc has submitted its recommendations for the period 201516 to 202021. Are you ready for insta 75 days revision plan upsc prelims 2020. Fourteen 14th finance commission economics study material. The 14 th finance commission has submitted its report to the president pranab mukherjee.
Why states are demanding more from the 15th finance commission. The first finance commission was established by the president of india in 1951 under article 280of the indian constitution. The finance commission is a constitutional body formed by the president of india to give suggestions on centrestate financial relations. Components of total transfer to states decided by finance commission and planning commissionfinance ministry. Here we are sharing some important information about 15th finance commission. For the period from 1st april, 2015 to 31st march, 2020, the 14th finance commission ffc was constituted by the orders of president on 2nd january, 20 and submitted its. Reddy was appointed the chairman of the commission. The finance commission is a constitutional body, that determines the method and formula for distributing the tax proceeds between the centre and states, and among the states as per the constitutional arrangement and present requirements. The government of india, with the approval president of india, has constituted fifteenth finance commission.
The finance commission miscellaneous provisions act, 1951 additionally defines the terms of qualification, appointment and. Know the recommendations of the 15th finance commission. Read about the 15th finance commission in this article for ias exam preparation. Government has accepted fcs recommendation to increase the devolution of tax receipts from the centre to the states to 42 percent. Aug 05, 2015 the 14th finance commission report has been accepted by the center,the report has been tabled today and it recommended that the center transfer 42% of divisible pool to the states, including taxes and grants the th finance commission had suggested it a 39. Reddys 14 th finance commission for vertical devolution of taxes from union to states. The first report, consisting of recommendations for the financial year 202021, was tabled in parliament on february 1. It was formed to define the financial relations between the central government of india and the individual state governments.
The principles determining the grantsinaid to states. Oct 20, 2019 the 15th finance commission is the first finance commission set up after the abolishment of the planning commission. Review and outcomes 4 there have been changes based on the formula now being pursued. Recomendations of the 14th finance commission andhra. Performance audit of ulbs on financial and performance reporting i. Get ready for upsc civil services preliminary exam 2020 with insights insta 75 days revision plan.
Finance commission, the hpec report on indian urban infrastructure and services, and an adbsponsored study footnoted here, shows that 4 see government of india. Impact of the 14th finance commission and css sharing pattern on. Recommendations for 14th finance commission given below is a summary list of recommendations which we believe are worthy of consideration for inclusion in the report of the 14th finance commission fc. The 14th finance commission was setup by the president in january 2014 under the chairmanship of the former rbi governor y v reddy and its other members were sushma nath, m govinda rao, sudipto mundle, abhijit sen. The basicgrants consist of 80%of this amount while the remaining. Pdf the 14th finance commission has been hailed as pathbreaking for recommending larger fund allocations to state governments and. A trustbased approach towards local governments article pdf available april 2015 with 1,760 reads how we measure reads. The 15th finance commission is the first finance commission set up after the abolishment of the planning commission. The government is in process of constituting the 14th finance commission and has approved its terms of reference, minister of state for finance namo narain meena said in a written reply to the lok sabha. The fourteenth finance commission report will go a long way towards promoting cooperative federalism. The one of the important 14th finance commission recommendations is enhanced share of the state in the revenue. Singh former member of parliament and former secretary to the government of india. Terms of reference the commission was asked to make recommendations on the following matters. Vitta ayoga was established by the president of india in 1951 under article 280 of the indian constitution.
The share of states in the centres taxes is recommended to be decreased from 42% during the 20152020 period to 41% for 20202021. The distribution of taxes collected between the centre and the states. The 15th finance commission has been mandated to use data from the 2011 census. There is a divergence in the growth projections between the ffc and the central and state governments. The commission s chairman was former reserve bank of india governor y.
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